The City Commission of Arkansas City voted unanimously July 11 to authorize the issuance of taxable Industrial Revenue Bonds (IRBs) for KanPak LLC.

The bonds would be used to finance the acquisition, construction and equipping of a new 200,000-square-foot distribution facility, to be located in Goff Industrial Park. The bonds cannot exceed the amount of $17.5 million. The city will assume no financial risk for the project, only KanPak and its construction companies.

“(We’re) ready to have shovels in the ground as soon as possible,” said Shane Solberg, KanPak general manager.

KanPak has plans to build the new warehouse, from which its products can be picked up by customers and distributed nationwide, to help to alleviate space shortages at the current facility in south Arkansas City. “If you look at our facility now … we’re landlocked,” Solberg said.

In the first year, the new facility will provide an additional 20 jobs in Ark City. About 12 employees also will be moved from the current plant to the new building.

The cost-benefit analysis presented to the commissioners shows that there will be a net benefit to the city within the first 10 years, during which there will be an exemption from property taxes and any sales taxes incurred by the facility. Similar benefits are estimated for the county, school district and state.

After the 10-year abatement is up, the net benefit should increase even more. “It’s a dual benefit for the city,” said City Manager Nick Hernandez.

KanPak also will expand the product lines it currently operates. The company has outgrown its current facility to the point that products literally leave the production line and and are loaded directly onto trucks to their final destinations, since there simply is no more warehousing space available.

KanPak currently is bidding out the project, but plans to stick with local businesses as much as possible for the construction.

It likely will be 16 months from groundbreaking to the completion of the facility.

In other business, the commission:

  • heard a budget presentation from Arkansas City Public Library Director Mendy Pfannenstiel.
  • unanimously approved the consent agenda, including the reappointments of Carl Bowman and Brian Mayfield to the Building Trades Advisory Board.
  • unanimously approved the appointment of Mark McGuigan to the Arkansas City Recreation Commission, replacing Michelle Dykes, who resigned recently.
  • unanimously approved five personnel policy updates.
  • unanimously approved an ordinance adopting the 2017 Standard Traffic Ordinance. The main change from last year is a $20 hike in seat belt fines, all of which will be remanded to the State of Kansas.